The word “collaboration” is certainly more used today in procurement and supply chain management than it ever has been before. Indeed, it is probably over-used. (Google found me “about 130,00,000 results”…) Any interaction with a supplier that is not overtly hostile or transactional is now badged as “collaboration”, when often it is nothing of the sort.
However, when we talk about sustainability and purpose, it is genuinely a very powerful word and concept. It is hard to imagine any organisation running a successful programme in that field without making use of various collaborative processes and initiatives. We actually see three quite different types of sustainability collaboration, all of which have their value.
Buyer / supplier collaboration – perhaps the most “traditional” in procurement terms. That might be talking to a key supplier about an initiative to develop more environmentally friendly packaging, or working with multiple key suppliers on carbon reduction initiatives.
Sector and industry collaboration – a good example is the work done by cocoa and chocolate firms collaboratively to “end deforestation” in cote d’Ivoire and Ghana. It is interesting to see how many firms , that would normally be competing against each other vigorously, are working together in various industries to drive sustainability improvements.
Wider collaboration – often based on spreading best practice, education or similar. The Sustainable Procurement Pledge is a good example, and there are many groups, formal and informal, where different interested parties come together to address an issue or problem.
But a word of warning. It is easy to talk about collaboration; it is more difficult to make it work. We know that from the chequered history of “supplier relationship management”, which has promised so much but has not delivered in many organisations. Even collaborative initiatives that sound non-contentious can run into problems when different participants have different interests or expectations.
So, based loosely on material from the “Procurement with Purpose” book, here are some key points to note if you want to ensure success in terms of collaboration with your suppliers, and indeed potentially more widely.
1. Collaboration is time- and resource-consuming, so don’t think you can do it with every supplier. Focus on where the benefits are potentially the greatest – that applies actually whether you are collaborating for a purpose-driven reason or to drive value and innovation. And technology can certainly help.
2. Suppliers must see the benefits to them of collaboration. The benefits and value created must be shared. (This is perhaps the main reason why SRM programmes fail – buyers don’t think enough about what suppliers will get out of it and how they will get value too).
3. Successful collaboration almost always involves internal stakeholders beyond the procurement and sustainability teams. Operational managers, technical staff and finance people may all have critical roles to play. The same applies on the supplier side – it must go beyond the sales people.
4. Benefits may take years to come through – for instance, look at some of the successes in terms of new recyclable materials which have taken years of development. Be ambitious and drive for action, but understand when it is appropriate to be patient.
5. Collaboration across multiple buying and/or supplying organisations can be particularly powerful to address major issues. That can be based on similar firms in a sector, or geographies, or a shared interest in a particular purpose-related issue.
6. Do consider where collaboration might lead to the loss of competitive advantage for your organisation. But balance that with the benefits of sharing in terms of resources and cost, and the wider benefits of spreading good practice and information about positive purposeful outcomes.